Recent events have created an extremely challenging set of conditions in Utah and throughout the world. The global pandemic is changing the way of life for many and it is difficult to predict how long the effects will continue.
The extractive industries have not been immune and are facing unprecedented times. Oil prices are at historic lows due to the reduction in travel and political disagreement among petroleum producing countries. Utah petroleum operators are struggling to keep production flowing even as consumers see some of the lowest gasoline prices in years.
Oil and gas production plays a vital role to Utah’s economy by providing energy-related jobs, boosting local businesses and generating oil and gas tax revenues. The Division’s budget relies heavily on monies generated from a conservation tax, which is 0.002 or 20 cents for every $100 of produced value of crude oil or natural gas. We will need assistance from policymakers to help maintain our role of ensuring responsible development of resources, while protecting citizens from the adverse impacts of development.
Even though production will temporarily decrease, there are over 16,000 wells statewide and 30 disposal facilities that need to be inspected. As the economics of the extractive industries decline, operators may limit resources to maintain facilities or go out of business entirely. Oil and Gas Program inspectors will continue inspecting sites to prevent any harm to people or the environment.
The Division supports the environmentally responsible development of essential petroleum resources with a commitment to public safety, needs and education. Staff is committed to protecting the environment through the regulatory processes that monitor responsible energy development.
The Division’s Oil and Gas Program field inspectors perform many types of inspections on approximately 16,000 oil and gas wells statewide. Inspections are critical to protecting the citizens and environment, while promoting responsible development.
Over the last several years, staff has worked with the Groundwater Protection Council (GWPC) to develop and implement a Field Inspection Prioritization Program designed to display in a spatial and report form which oil and gas sites should be inspected according to various inputs.
All oil and gas wells were given a priority rating from one (highest priority) to four (low priority). Prioritization is based on operational factors such as compliance issues and history, age of the well and how long since the last inspection. Geographic factors include well proximity to surface water, groundwater, human population density and wildlife habitat.
The program has been operational since January 2020 and has already helped our inspectors increase their inspection efficiency. The field application allows real time data collection that is automatically uploaded to the database saving inspectors time and reducing input errors. The program empowers inspectors to consistently make decisions leading to reduced risk and more effective regulation through timely inspections.
This is an effective tool that will give management and staff the ability to make data driven decisions ensuring protection of Utah’s resources, while promoting responsible development.
During the 2020 legislative session, there were three bills passed affecting the Division of Oil, Gas and Mining.
Senate Bill 148 requires review of rules made related to bonding requirements; modifies the process for imposing and collecting administrative penalties; creates the Oil and Gas Administrative Penalties Account; and makes technical and conforming changes.
In response to the Oil and Gas Program audit, the Board of Oil, Gas and Mining Chairman Ruland Gill helped to educate lawmakers about this bill which allows the Division to collect administrative penalties from non-compliant operators as if the penalty were a judgment issued by a court of law. Before this bill, any fines issued by the Board were required to be collected through district court, which was expensive and time consuming. SB 148 allows the Board to collect fines directly and deposit them into an account used to offset risks the bonds do not cover.
This bill also gives the Board authority to review bonding requirements to ensure there is adequate fiscal security to the state.
Two separate bills, Senate Bill 131 and House Bill 294 affect the Minerals Program. SB 131 changes the size of small mining operations from 10 to 20 acres in unincorporated areas and 5 to 10 acres in incorporated areas. This bill affects approximately 20 permits currently in our system. The requirements for small mines are less stringent than those for large mines so this may encourage smaller operators to open new pits under the new size definitions. This will allow for smaller operators to have more opportunity to enter the market.
HB 294 exempts basalt operations under 50 acres from the Division’s regulations. Approximately five currently permitted operations will no longer be under our jurisdiction, and the bill also allows for more operations to start up without requiring a permit. This legislation is intended to be very narrow and only apply to a certain type of geology found in Southern Utah, where it is beneficial to remove basalt in order to access sand and gravel.
The Division will create and amend rules where necessary to address the new legislation.
Richard Powell is an environmental scientist/field inspector in the Oil and Gas Program. He’s been in the program for 15 years and is based in the Vernal field office. As a Uinta Basin oil and gas field inspector he monitors, inspects and advises operators in all aspects of oil and gas activity from initial pre-site inspections and drilling to final well plugging and reclamation.
Richard brings expertise and experience that gives him the skills necessary to ensure oil and gas development is done properly. Regulatory oversite is needed to make sure oilfield operations, such as produced salt water disposal, spill cleanup and drilling, are completed while protecting the resources of the state.
The best thing Richard likes about his job is working in very remote areas of the state. Because his truck is his office, he often deals with extreme temperatures, weather, potential flash flooding and lots of dust.
Richard received his Bachelor of Science degree in Environmental Science from Utah State University. Before joining the Division, he worked as a service supervisor for BJ Services, a worldwide oilfield pressure pumping service provider and as a licensed environmental health scientist for the TriCounty Health Department.
He is married with four children. He is active in church and community activities including youth sports coaching and most recently assistant coach for the Uintah High School mountain bike team the Rollin’ Utes. Richard has numerous hobbies including leather work, raising registered Black Hereford cattle and registered 100% New Zealand Kiko goats, archery, Dutch oven cooking, gardening and mountain biking.